Are Alumni Networks Valuable?

One reason given for the value of an MBA degree is the relationships that one develops with other students as well as the connection to the larger alumni network. Such relationships can eventually be used to open doors, secure a place at `the table’ and traded with others. While I’ve long since replaced the belief in `res ipsa loquitur‘ for `who you know matters’, I’m still not convinced by the relationship story.

Suppose introductions to gatekeepers and decision makers are scarce resources. When handing them out, why should I favor someone just because we attended the same institution? Presumably what matters is what good turn the other might do for me. Surely, this will depend on the position held rather than the school attended. Furthermore, why should the other’s academic pedigree suggest anything about the likelihood of the other returning the favor in the future? I know of no B-school that claims that it is selecting a class of future Cato’s.

True, favors are not requested or granted until a bond is established between the parties. Having something in common assists the formation of such bonds. But, why should having attended the same school be any more useful in this regard than a common interest in wine, golf or stamps?

Finally, if the alumni network is valuable, then merging two small networks should increase value for members of either network. Thus, in much the same way that some airlines share their frequent flyer programs (eg star alliance), we should see certain schools merging their networks. Haas and Anderson? Johnson School and Olin? One sees something like this at the executive masters level but not at the full time MBA level.

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7 comments

The value of the alumni network is that it is dense: you and person you are doing the favor for are both connected to others from the same alumni network. If she fails to return the favor, you can complain to other alumni you know and pretty soon none of them will be doing any more favors for her. So your favor will be returned with higher probability if the recipient is a member of your own alumni network.

Does it occurr to you that people just tend to be belpful to people with whom they have spent one year with? i’d help my third-grade buddy if the chance arised. It’s not some superimposed label as you seem to think.

Alas, no. Must be the Hobbes in me. You said that you would help your 3rd grade buddy if the chance arose. Well, lets put this to a hypothetical test. Would you help if they would ask for $1K? Would you give them a strong reference for a job? What if many of your former schoolmates ask for the same favor simultaneously? I think the answer in each case would be that it depends. What is the extent of the claim? Is it one you could satisfy? What are the costs to you of acceding to it?

If its about whether one’s neighbor’s neighbors are one’s own neighbors, why rely on academic background to determine this? Why not verify this directly? Even if one accepts the density argument, this would suggest big benefits from merging networks.

Hi Rakesh,
I think that within a cohort at a single school the network forms at very low cost compared to within cohorts across schools. There is also a relatively low cost of network formation between adjacent cohorts at the same schools. The larger alumni network can piggy-back on this and again form at lower cost within schools than across schools.
Sorry for the delay; I forgot to check the follow-up notification box!

Also there is probably also some brand value effect, since your alma mater shows up at the top of your resume forever. Even well established older alumni have an interest in maintaining the brand. To do their part they can preferentially recommend candidates from their own networks. Recognizing this, the schools themselves aggressively advocate their alumni networks, and provide institutional support. It’s hard for me to see how a merged network could develop a brand that is either independent of or an amalgamation of the individual school brands.

Ah, one more thing. It’s not only about whether you and I have mutual neighbors. Paths longer than 2 are also relevant, but are much harder to discover and verify. If we are both in the same alumni network we can guess that numerous such paths probably exist.